PEST Analysis of Dubai Market

Political Environment
Dubai is one the seven emirates that comprises of United Arab of Emirates. Although UAEs political
environment is stable; the structure of government at both the national level and in each of the
emirates is relatively immature and dynastic in nature. At the national level, the UAE operates as a loose
confederation of seven emirates. Since Abu Dhabi is the largest oil producer the ruler of Abu Dhabi
typically claims the presidency, while the ruler of Dubai typically occupies the vice-presidency.
There is a well-defined, sound legal framework for business and a clear set of ownership rules.
Foreigners are permitted ownership rights of up to 49% for limited liability companies established within
the Emirate of Dubai and up to 100% for professional companies, branches and representative offices of
foreign companies and free zones enterprises (Government of Dubai Website, 2014).
The government has a long, consistent commitment to pro-business and liberal economic policies
including the protection of intellectual property rights (Government of Dubai Website, 2014).
Economic Environment
Dubais main revenues are from tourism, real estate and financial services. Revenues from petroleum
and natural gas contribute less than 6% of Dubai's economy. Real estate and construction, on the other
hand, contributed 22.6% to the economy (Arabian Business, 2014).
As of February 2009 Dubai's foreign debt is estimated at apprx. USD 100 billion.
There are no direct taxes on corporate profits or personal income except for oil companies that pay a
flat rate of 55% and branches of foreign banks that pay a flat rate of 20% on net profit generated within
Dubai (Government of Dubai Website, 2014).
Customs duties are low at 4% with many exemptions, 100% repatriation of capital and profits is
permitted. No foreign exchange controls, No trade barriers or quotas,Competitive import duties (4%
with many exemptions)
Social Environment
A large expatriate population (more than 80%).
Crime Rate is almost Zero.
Male comprises of more than 70% of Dubai population.
More than one marriage is allowed.
Traditional dress of men in Dubai is a dishdash or khandura - a full-length shirt-dress that is worn with a
white or red chequered headdress (gutra) and secured in place with black cord (agal). Women wear a
black abaya - a long, loose black robe that opens from the front. (Go Dubai, 2014)
There is no dress code and tourists and residents are free to embrace any fashion as long as it does not
offend anybodys sensibilities.
Technological Environment
Dubai has a network of seven industrial areas, one business park and three highly successful, specialized
free zones of international distinction, two world class seaports, a major international airport and cargo
village, a modern highway network, state-of-the-art telecommunications and reliable power and utilities
all of which deliver efficiency, flexibility, reliability, reasonable cost and size (Government of Dubai
Website, 2014)
Dubai is served by over 120 shipping lines and linked via 85 airlines to over 130 global destinations
(Government of Dubai Website, 2014).
Storage Market Analysis
As mentioned earlier 80% of the workforce is made up of expatriates. Many of these expatriate workers
have no permanent home in Dubai or the rest of the emirates. The majority of expatriates live in
apartments with being the accommodation of choice. In the questionnaire, 90% of the expatriate
workers surveyed said that they lived in an apartment.
In response to the question: do you have trouble storing your personal items in your current
accommodation, 80% answered yes. This could indicate there is a potential market for the service.
When asked about the ways they have dealt with their storage problems (of those that had a problem),
34% responded that they stored extra items at a friends place. 60% said that they employed the
services of a storage company.
A small market scan reviled the following list of major competitors:
Dreamdays
Choice Holidays
RAK Royal Adventures
Therefore, the helicopter tour market has some competition. However, this competition can be reduced
by offering a luxury setting.
This marketing technique is back by the response to the question: do you prefer luxury or affordability in
a helicopter tour?
Approximately 82% of the respondents answered yes. 76% of the respondents answered yes to
question: would you be willing to pay for extra for a luxury helicopter tour?
References:
www.dubai.ae/en.porta
www.arabianbusiness.com
www.godubai.com/